60 Minutes: Segment Extras

60 Minutes - Business

60 Minutes: Segment Extras

The Madoff Scam: Meet The Liquidator

60 Minutes Meets The Man With The Daunting Task of Trying To Recover Madoff Victims' Cash

2009Sep 25

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Wall Street in shreds, the watch dogs fast asleep, bonus-stuffed executives laughing all the way out of the busted banks - it's been some year. Oh, and we left out the Ponzi scheme of Ponzi schemes: Bernard Madoff's untidy little business that bilked thousands of people out of billions of dollars.

While the mastermind is doing 150 years in prison, the big question is: "Where did all the money go?"

Irving Picard, the court appointed trustee - the liquidator - is searching for the billions that disappeared, and trying to recover as much as possible from Madoff's remaining assets.

It is a daunting and thankless task, for while he is suing whoever he can on behalf of the victims, he's also suing many of the victims - those who he says benefited and should have known they were investing in a house of cards.

Mr. Picard and his chief counsel David Sheehan have been largely silent about the details of the recovery, until now.

"Last November, just before the whole thing collapsed, Bernard Madoff sent out statements to his clients. How much were they told they were worth?" correspondent Morley Safer asked.

"About 64.8 billion dollars," Irving Picard replied.

Asked if the statement were total lies, David Sheehan said, "Yes, absolutely."

The $64.8 billion that investors thought they had was just an illusion, designed by Madoff to keep investors investing.

Last December, the roof fell in.

Mr. Madoff has no say in the matter. If the victims want any money back, they'll have to go through Mr. Picard, the decider, and his bloodhound, Mr. Sheehan.

Asked how much real money went into the whole scheme, Sheehan told Safer, "I'd say about $36 billion. And about 18 of it went out before the collapse. And 18 of it is just missing. And that $18 billion is what we're trying to get back."

So for the past nine months, Picard and his team have been on a global treasure hunt. The first step: liquidating Madoff's boats, his art, even his season tickets to the New York Mets, plus Bernie's various homes, all sold or about to be sold with a U.S. Marshal as real estate pitchman.

"They didn't exactly hide their wealth, did they?" Safer asked.

"They did have the house in Palm Beach. They had a place in Montauk. They had to have, you know, an apartment here on Park Avenue in the city - all of which are the accoutrements of great wealth. But it wasn't an extraordinary lifestyle," Sheehan said.

According to the government, those homes, boats, art and more are worth over $50 million.

That's just a drop in an oversized bucket, nothing close to what investors lost. So Picard and his team continue to follow the money.

They started at Madoff's New York offices, now an impressive landscape of emptiness.

And close by, perhaps a work of art that sums up the entire story: "It was called the 'Soft Screw.' And it was about four, I guess four to six feet high. And it was sitting right here," Picard explained, describing a screw-like sculpture that used to be displayed in Madoff's office.

And sitting on top of the world was Madoff himself. "He was much like the Wizard of Oz, just hiding behind this wall. And no one could quite penetrate it but they sort of really liked the results," Sheehan said.

"As far as you've been able to find out, was he ever legitimate?" Safer asked.

"No, it was never legitimate," Sheehan said. "And I think Bernie, if he told the truth - which he's not capable of - he would then say, 'Yes. I started out as a crook, and I ended up as a crook.'"